Tampa-based Walter Investment Management Corp., which specializes in handling subprime and other "credit-challenged" mortgages, is taking over a multibillion-dollar portfolio of reverse mortgages.

Walter Investment has agreed to buy Reverse Mortgage Solutions Inc. of Spring, Texas, in a deal valued at $120 million, the company said Tuesday.

RMS services about $12 billion in reverse mortgage loan balances and has issued about $1.1 billion of reverse mortgage-backed GNMA securities in the first half of 2012. That makes it the fourth-largest reverse mortgage servicer and the second-largest issuer of securities in the sector this year.

The acquisition of RMS, which is expected to close in the fourth quarter, will position Walter as a full-service leader in the $140 billion reverse mortgage servicing sector, Walter executives said. Reverse mortgages, which are most common among seniors who owe little to nothing on their mortgages, allow homeowners to tap into their home equity and receive monthly payments from their lender or use the equity as a line of credit.

"RMS is led by a very experienced and well-respected management team and has performed exceptionally well since its inception in 2007," Walter Investment chairman and CEO Mark J. O'Brien said in a statement. "The sector has very attractive long-term growth prospects and is currently undergoing significant structural change, providing us with an opportunity to capitalize on those dynamics."

Since spinning off from the former Walter Industries in 2009, Walter Investment has morphed from 225 employees to more than 2,600, fueled largely by its $1 billion acquisition of giant home loan servicer Green Tree Credit Solutions last year. The RMS deal adds another 330 employees.

Shares in Walter Investment Management jumped more than 14 percent Tuesday to close at $31.94, up $3.95.

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